Green Energy Failing at the Expense of Natural Gas

We were recently in my hometown of Miles City, Montana, for the annual Bucking Horse Sale. It is a unique event that is a combination of old-fashioned rodeo and livestock auction. It is where the rodeo companies come to buy their stock for the ensuing rodeo season. Normally the talk is about cattle production, crop production, and surviving another cold Montana winter.

But not this year. This year it was all about the Bakken – for the uninitiated the Bakken refers to the Bakken oil and gas field spanning the western Dakotas, eastern Montana, northeast Wyoming and extending substantially into Canada. Its natural gas reserves exceed the estimates of oil in the Saudi peninsula. On top of that the oil shale, when the full expanse of the field is mapped, may well equal or exceed the oil estimates in the Saudi Peninsula. And much of it is adjacent to or overlain by massive coal deposits. It is, in a word, the crown jewel in what should be the plan for energy independence.

The economic benefits from the production are evident all across the region. Housing is so limited within the field itself that people commute 100 miles daily form Miles City to work the field. In a town of 8,500 people, Miles City has seen the commencement of $85 Million in new, privately funded, construction this year. Unemployment in Miles City is practically non-existent. Only those who will not work – preferring welfare to work – remain unemployed. This represents a microcosm of the economic benefits to full utilization of America’s abundant energy resources.

But a combination of environmentalists and liberal Democrats – including President Barack Obama – are hell bent on ensuring that the Bakken field remains frozen wheat fields. It is an attitude the permeates the Obama Administrations energy policy and despite Mr. Obama’s braggadocio that energy production has increased under his administration, the amount of energy produced from federal lands has actually decreased while the amount of energy produced from private lands has increased – mostly due to permits granted under President George W. Bush’s administration.

Although Mr. Obama’s pronounced policy toward energy productions is “All of the Above” his actual practice toward fossil fuel production can best be described as “Hell No!!!” In lieu of an energy policy based on science and capacity, Mr. Obama prefers one of expensive subsidies, poorly developed technology and half measures of implementation.

For instance, when the Chevrolet Volt was introduced, General Motors was best described as majority owned subsidiary of the federal government – a federal government under the control of Mr. Obama who has since demonstrated that he is willing to throw the substantial resources of the American taxpayers at virtually any harebrain scheme that does not involve fossil fuels. General Motors remains under the substantial influence of Mr. Obama’s administration and continues to pursue the Volt despite the cold shoulder from American consumers.

Let’s make sure we understand what the Chevrolet Volt is. It is a $17,000 Chevrolet Cruz that has been retrofitted for an electric motor that provides – under ideal conditions – no more than 40 miles before it switches over to a gas motor that is no more fuel efficient than the rest of General Motors standard fossil fuel burners. And all this for the bargain price of $45,000. That is a $28,000 premium for up to 40 miles of driving after an overnight charge. Experts have estimated that the amount of fossil fuels consumed to produce the electrical charge needed to power the Volt for that 40 miles is comparable to the amount of fossil fuels consumed by a gasoline powered vehicle getting 40 miles per gallon – a number of which are already on the road.

The Chevrolet Volt began retail sales in December of 2010. Less than 6,500 units were delivered in 2011 according to Bloomberg. There is no data indicating the number of those 6,500 units that were purchased by federal, state, and local governments that are under the control of Democrat administration but given the proliferation of Democrat office holders who proudly show off their taxpayer purchased Volts, we can assume that it is a sizeable number.

Again according to Bloomberg, General Motors, having failed to meet their goal of 10,000 units in 2011, set a goal of 45,000 for domestic sales and another 15,000 for export. Through April of 2012, according to Wikipedia, General Motors had delivered only 5,400 units. General Motors has now abandoned its targeted production and has elected to produce based on demand. And that demand continues to diminish as government agencies have maxed out their purchases and the wealthy, politically correct, have exhausted their patience for purchasing exotic but useless toys. And then there are the 8,000 units that have been recalled because of the danger of electric fires in the Volt’s battery system. Great car! It’s what you get when the government controls your business and it is willing to spend taxpayer money freely.

What is all the more remarkable about this exercise in manufacturing stupidity is that there is already a vehicle available on the market that runs on an alternative fuel that is more abundant than all of the oil in the Arab world and which cost pennies per mile to operate when compared to current gasoline prices. It’s the Honda Civic GX. Its price tag fully loaded is less that $27,000. (The gasoline powered Honda Civic retails for about $18,000 so there is about a $9,000 premium for natural gas compared to a $28,000 premium for the Volt.) The Honda Civic GX can run on either natural gas or regular gasoline. For $9,000 you can have a natural gas delivery device installed in your home that refills the car overnight.

The technology for converting gasoline-powered engines to natural gas has existed for years. It was developed without government assistance and without significant taxpayer dollars. Mass production of clean burning natural gasoline engines would most certainly drive the per unit cost down dramatically. Not so with electric cars because the main costs for electric cars are in the batteries – not the electric motors. And while the Nissan Leaf and the Tesla have achieved storage capacity that permits over 200 miles per charge, the Obama run General Motors has achieved only 40 miles per charge. But neither has achieved the breakthrough that allows rapid recharging (the time it takes to fill a tank) coupled with a sustained capacity of 200 miles.

To put it mildly, the government funded Volt is not ready for prime time. The private technology Honda Civic GX is. One wonders why the government has not embraced natural gas with is great abundance and relatively clean burning capability as a preferred alternative to foreign oil. However, it is the insistence of the leftist politicians that fossil fuels must be eliminated in favor of “green energy.” It is probably the single most egregious example of a government trying to pick the winners and losers in what should be a free and open market.

Billions of taxpayer dollars have been expended without recourse to prop up General Motors. The trade-off has been the current emphasis by General Motor on the Chevrolet Volt. Millions more taxpayer dollars have been spent in tax credits in support of electric vehicles. (As an ironic aside, one of the earlier attempts of providing tax benefits for electric cars wound up rewarding rich, white, country club members whom acquired new electric golf carts for almost nothing under the program.)

And yet, in spite of the billions spent, the full throated support of the federal government (and Democrat controlled state and local governments) and the million dollar ad campaigns by General Motors, the Chevrolet Volt remains an unwanted, over priced, under-performing hunk of metal that has been rejected in large by the consuming public. One is tempted to say that the Volt is General Motor’s Edsel – except the Edsel disaster was all done with private financing, not taxpayer dollars.

It joins the solar panel industry that is near collapse in America and the wind energy program that is demanding renewal of its taxpayers’ subsidies in order to continue. At some point, we need to cease spending taxpayer dollars on liberal politicians “great ideas.” When we are spending forty percent more than we are taking in, the elimination of taxpayer subsidies to energy producers of all stripes is a good place to start balancing the budget. And that should be followed by the end of taxpayer dollars to electric vehicle producers.

But given the penchant of liberal politicians to spend your money on their great ideas, the idea of taxpayer subsidies to the “green” economy is highly unlikely.

And contrast the dynamic economic rebound of Eastern Montana because of the Bakken field with Oregon’s liberal establishment who promote wind energy through subsidies but block transmission lines to move that energy from where it is produced to where it is used. There is something dramatically wrong in Oregon’s liberal government class.